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Inward Greenfield FDI and Patterns of Job Polarisation

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Abstract

The unprecedented growth in FDI in the last decades has caused drastic changes in the labour markets of the host countries. The major part of FDI takes place in low tech industries, where the wages and skills are low, or in high tech, where they offer a wage premium for the highly skilled workers. This mechanism may increase the polarisation of employment into high-wage and low-wage jobs, at the expenses of middle-skill jobs. This paper looks at the effects of two types of FDI inflows, namely foreign investment in high-skill and low-skill activities, on skill polarization. We match data on greenfield FDI aggregated by country and sector with data on employment by occupational skill to investigate the extent to which differ types of greenfield FDI are responsible for skill polarisation.

Suggested Citation

  • Sara Amoroso & Pietro Moncada-Paterno-Castello, 2018. "Inward Greenfield FDI and Patterns of Job Polarisation," JRC Working Papers on Corporate R&D and Innovation 2018-02, Joint Research Centre (Seville site).
  • Handle: RePEc:ipt:wpaper:201802
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    Cited by:

    1. Zoltan Csefalvay, 2019. "What are the policy options? A systematic review of policy responses to the impacts of robotisation and automation on the labour market," JRC Working Papers on Corporate R&D and Innovation 2019-02, Joint Research Centre (Seville site).
    2. Bettina Becker & Nigel Driffield & Sandra Lancheros & James H. Love, 2020. "FDI in hot labour markets: The implications of the war for talent," Journal of International Business Policy, Palgrave Macmillan, vol. 3(2), pages 107-133, June.

    More about this item

    Keywords

    Greenfield foreign direct investment; labour market; skills;

    JEL classification:

    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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